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Website: www.MillenGroup.com

Lisa Ryan: Hey, it's Lisa Ryan, and welcome to the Manufacturers Network podcast, Live Edition, and we're excited to introduce you to our guest today, John Millen. Now, John is a benefit hacker over the last 20 years in the employee benefits industry. He became annoyed and upset that there were not better ideas to contain health care costs and improve benefits for employees, having been a victim of a high deductible medical plan himself. He decided to radically change the way health care plans are presented to employees, to employers.

John is the Millen Group's co-founder, an independent benefit advisory firm located in Richmond, Virginia. And over the past two decades, manufacturing has been the number one industry that they've been able to improve. So, John, welcome to the show.

John Millen: Great. Thanks, Lisa. Thanks for having me on. Appreciate it. Absolutely.

Lisa Ryan: Share with us a little bit about your background and what led you into employee benefits and particularly your focus on manufacturing.

John Millen: Yeah, so absolutely. So my training from college was as an engineer, mechanical engineer. And in that field, you're solving lots of problems. Yes, it's about math and physics and all that stuff. But you're solving problems.

And several years ago, I remember going through the process of open enrollment for myself. I picked a medical plan, which happened to be a very high deductible medical plan, thinking that's all I needed. I didn't have any advice. I just picked it because it was the cheapest and ended up learning the hard way that I picked the wrong plan in that process.

And then, over that period, after that, you have a sting like, oh, my gosh, why didn't anyone tell me that it worked this way? We have provided different types of benefits for almost 20 years to small companies and big companies. I started seeing what was being communicated to employees from the front of the room, and I got irritated, and I got mad. I'm like, why are they not saying this way?

And then not saying this? And it started from that. I wanted to fix the problem. I was tired of seeing other people get burned by different things. And there were some mistruths, not intentional people aren't bad people, but they just didn't know what they didn't know.

After several years of that, seeing companies do things a certain way, we wanted to hack it in a good way. Benefit Hacker. It was very catchy. It gets people's attention, but it's like, hey, there are things you can do that you've been told may not be the right thing, especially over time.

Everyone says, right, right. Who wants to sell insurance? Like I didn't go to college to sell insurance. And I don't love selling insurance. I love solving problems. And insurance is a mechanism. It's a risk mechanism that is always changing. So that's kind of what led me to this industry.

Lisa Ryan: Right. And it's something that with benefits, it's always on our mind. I know for me, with my husband being furloughed last year for ten months, that was the one question that kept popping up is, holy cow, what are we going to do if he gets laid off and we don't have benefits and going to the market or using COBRA or whatever? So from my own experience, thank goodness our Christmas present was that Scott got called back to work in December, and now we don't have to worry about that anymore.

But when companies are thinking about employees and, you think that, OK, well, employees, they're an asset versus a liability. But from our conversation, before we were talking about that, they look at their employees as assets, but they don't generally treat the employee benefits spend that way. So what do you see as far as the investment versus expense? Fascinating.

John Millen: So it's a little thing I do when I get on an early call with the president or the CFO of a manufacturing facility, I'll just ask a simple opening question: Do you view your employees as an asset or a liability? And they kind of chuckle. They go, well, I have a few liabilities, but they're mostly assets, like, OK, we agree with that. I said, so then the money you're spending the three-quarters of a million dollars on your benefits for the year you're spending, do you view that as an expense or an investment?

And it trips them up, and it's because they want to say expense. After all, it's an expense that comes off the top line. But you invest in assets. Right? So it's an investment. And the reason I talk about that is because so many people get it. Focused on the wrong thing, if you're spending three-quarters of a million dollars every year, what is the value you're getting from that? And sometimes the value is not very good.

For the client we worked with last year, the money they spent was not like we're not maximizing the dollars spent. And so that pivots the conversation a little bit from insurance, like who cares what the deductible is yet to. Let's maximize it spent because it's a big dollar amount.

Lisa Ryan: Well, not only getting the benefits for the employers themselves but just as a recruiting tool to get people on board, because when you have employees that are looking at you, that's one of the main things that the newer generations coming into the workplace right now are concerned about because they see how health costs can just destroy their family's finances. So just looking at they're investing anyway, making sure it's a good plan. But from your standpoint, also making sure that they're maximizing what that spend is.

John Millen: Absolutely. And you said something just there. People are more aware because of covid probably right now their health care. They're more aware of, like, how much do I have to pay out of pocket? And you talked about retention. Here's a great tip that everyone can use right away, no matter what industry. But this is something we integrated with our manufacturing clients is tell the applicant upfront about your benefits. Don't wait until a new hire orientation. And I think it's a strange reaction.

I get some people who are like; I don't want to do that. Like, well, is that because you have crappy benefits? But if you have good benefits, you should tell them if you have pretty crappy benefits, yet you may not want to say to them. So we started doing that where you take your benefits book, right, that you create and maybe it's just the first two pages of summary, and you show them these are all the different benefits we provide.

You want to show them the cost if you don't want to. But that is a recruiting tool because I guarantee you they're thinking about it in their head. They're thinking, what are the benefits like? What are the benefits? And ninety-nine percent of employees will not have the courage to ask usually. And so HR professionals, recruiters are surprised. They want to see the benefits. What do we give? What do we offer them? That should be a part of the applicant process.

Lisa Ryan: If you have a good benefits package, when especially when it comes down to they're looking at a couple of different employers to join, they have one employer who has been transparent and has shown them the benefits, and they're pretty good benefits, like, wow, this is cool versus nobody else sharing that information. So it sounds like it's certainly giving them an edge. Just the fact that they're providing that information and kind of setting in that employee's mind that, hey, this might be a pretty cool place to work.

John Millen: Here's another thing that that I would highly suggest. How many times do you go to a website for a company and find out careers and says benefits and it says health insurance, dental vision, whoopty do like just having health insurance today is not good enough.

You have to have a good health insurance plan. This is where the conversation pivots a little bit towards your spending half a million dollars or a quarter of a million dollars or a million dollars or whatever it is.

Are we maximizing that because your health plan needs some tweaking, needs some updating? Not only telling them, showing them the benefits, but don't just say we have health care because some people find out that means a six thousand dollar high deductible plan with no other coverage will be an issue?

Lisa Ryan: What do you think are the benefits that have the highest impact on employee attraction and retention?

John Millen: So great question. Health insurance, right? Medical insurance. It's number one. It's the thing that can devastate a family more than anything. So definitely your health insurance package. But I would say to look at that is not just health insurance. It's your health care benefits. I mean that health insurance is Blue Cross Blue Shield, a three thousand dollar high deductible plan. That's the health insurance. But the health care benefits might be things you layer in on top of that bundled in there to make the plan a lot more robust.

So definitely health insurance. But think of it, not just health insurance, but health care benefits. So what are some examples? What's been popular recently is telemedicine. We saw it kind of spring up last year. Hey, I can talk to a doctor over the phone or video at home.

Why? Because you couldn't go to the doctor and has been around for a decade. This is not new, but it took that moment for the industry to get shaken that we've been talking about it for six years. So we will add cost or investment a couple of bucks a month for people into the medical plan, even though they may have it because it enhances the benefit and makes it so much better. There are other benefits you can add in there, whether it's first dollar coverage or different types of supplemental plans that can take the perceived value or the actual value of the plan from here to here.

So not just health insurance, it's health care benefits, that whole little package, I would say that's number one. Number two: And this is going to surprise a bunch of if I told you, what are the three top benefits that you would ask for at an employer? What would you say were the top three?

Lisa Ryan: You would say health, wealth, the health benefits of vision and dental, I guess, would be the top three and the three most popular.

John Millen: But I would say you probably need to insert in their disability insurance.

Lisa Ryan: Oh, yeah, I have mine. I have a friend who had a tree fall on her when she was riding in the Metro Parks, and thank goodness she had disability insurance. Whenever I think about canceling my policy because I don't want to pay the benefits premium, I think about what she went through and what saved her because she had a disability.

So, yeah, I am all over that, and I've had my interest for, yet no one ever went bankrupt from a dental bill. No one ever went bankrupt because they couldn't get glasses, and so it's one of those just little nuances. Yes, you're going to have dental. Yes, you're going to have vision coverage. But sometimes what I tell them is, look, if you don't have employer-paid short or long term disability or both, maybe be making your dental vision partially voluntary or one hundred percent voluntary and give them a five thousand monthly benefit, because it's something that is not discussed.

John Millen: It's not sexy. It's important.

Lisa Ryan: When I see that Ramina popped in and said that she's been using her telemedicine for years for her parents, I mean, I think that that was one of the things that covid just brought in is I would have never thought that I could visit my doctor by phone. But the fact that you can't it's like that's just one of the many technologies that this pandemic has forced us into doing and making it normal and normalizing it because I just get my doctor on the phone and show him what's going on and it works.

John Millen: So it's been interesting. That's right. A lot of the medical plans have it. We don't always bundle it. And external, we do it when the. So here's an analogy on most medical plans, you have vision coverage. Is it very good vision coverage, you get an annual exam as part of your medical plan, does it pay for glasses? No. Does it pay for polycarbonate lenses? No. So, yeah, there's vision in it.

What I see, though, is some of the telemedicine plans, not all the time, need to be enhanced a little bit. And so that's when we say let's make it no cost, there's no fee ever. You can add your whole family. So these are just little things. Little tweaks. It doesn't cost a lot of money, but minor tweaks.

Lisa Ryan: Right. And this is kind of funny. Romina shared that she has a friend of hers who's a doctor and can do that while on vacation. So, again, we're looking up. Not that we want to be working. Twenty-four seven, for goodness sake, because we do need to take advantage of those vacations. But it gives us so much more flexibility than what we used to have when it comes to our benefit. So what are some of the things that you're seeing that maybe employees, employers are missing when it comes to their benefits, some of the biggest mistakes that they're making?

John Millen: So another great question. One of the things I've seen as a little bit of a trend, and it's going to sound a bit controversial. It's not mainstream as it's been around for the past 15 years. There's been this movement towards consumer-driven health care, meaning, hey, you spend three weeks researching that big screen TV at Best Buy, but yet you only spend five minutes when you need your knee replaced. You just go where they say there's a lot of truth in that, that we're not aware of the cost of health care because health care is not the same as health insurance.

So that is a big issue that's trying to be fixed. But I would say over the past 15 years. There are some cases when employees will not be a consumer of health care. They will go where their doctor says, period.

And I've heard for so long now, this is not all the time, but I've heard so long. And they say from the front of the room, next time you need a hip replacement, just go online. You can look at the costs. You can look at this.

And I think I have five thousand dollars out of pocket, max. That's all I'm going to pay. I don't care if it costs one hundred thousand or six hundred thousand. If my doctor says this is where we're getting it done, I'm going to go there. So there are some cases where consumerism is not working. In some places, it is prescription drugs, outpatient testing, things like that. It's working. So here's what I would say is look at your employee benefits options.

So some companies have one option. Some have to. Some have three, some have five and six, which I think is crazy. Ridiculous. Look at those plans and ask yourself, does it have prescription coverage? Because we're finding that prescription drugs are a third of the claims, and you can't get away from it on TV, see all these fancy ads. But prescription drug costs are going up fast. So if all you have are high deductible plans, meaning no prescription coverage until you hit your deductible, it's painful.

And that's what's happening with the rationing of insulin. People are cutting back their insulin because it's so expensive, and it's causing people to die from it. So this is a straightforward little thing you can add now. Is it does it add more cost? Yes, but it's an investment. And I'll give you a quick story. I was talking last year, I got a call from one of my manufacturing clients, and they had a new hire employee from a different state that was going to work for them.

And he had a bunch of benefit questions. So the HR manager called me. She said, would you mind talking to him? He's not an employee yet. He's looking. And I said, sure, I called him. And he told me he said, my prescription cost is two thousand dollars a month. Do they have any kind of plans that will help pay for my prescription I'm taking? I looked up the prescription, I looked at the plan.

We had redesigned, we had added back in prescription coverage. And I said I said, Greg, it's going to be 40 bucks a month for the copay. Forty dollars a month versus two thousand a month. That caused him to move from North Carolina in, among other things, not just benefits, but that's a retention tool, and that's a big thing that's missing, is having good prescription coverage.

Lisa Ryan: Wow. Well, so when you're looking at the fact that they're doing spending three-quarters of a million dollars on health insurance for their employees every year, what is the best way to get to maximize that spend?

John Millen: So the first thing I would say is knowing your five-year cost and your five-year projection. What is it going to cost you over the next five years? I asked this question a lot. How much are you going to spend on your health care or benefits package over the next five years? And I get blank stares. I don't know not only what you are going to spend, but it's compounding because most of the time, it's going up to eight to 12 percent a year.

So it's not just one plus one equals two. You're adding more on top of that. We show we show a potential client. This is what you're going to spend. They see seven million dollars. I say, all right, now it's perspective. You can no longer assume that eight percent renewals are good. I hear this a lot in our industry. I talk to a client. We just talk to our broker. And they said we got a five percent renewal, and that's good, and we should just move on.

I don't think that's good because it's been five percent and 12 percent and twenty-two percent. It's gone like this. So I think you've got to look at the thought out into the future and say, how do we bend this curve down? I don't see a lot of that happening. I see a lot of reactionary things. Last minute. Here's your window, Lisa. We just got your renewal back. It was a 12 percent increase. I got them down to eight.

I think it's the best thing you should take, not what does that look like five years from now? And can we try some new things.

Lisa Ryan: So as we're getting to the end of our time together, what's your number one tip that you would give to people listening today regarding what they're doing with their benefits to make them better and to use it as an attraction and retention tool?

John Millen: Wow. So, one, there are lots of things that I would say. From personal experience, working with tens of thousands of employees over 20 years is making sure that investment that you've created, that package that you're all of your employees understand, are educated about it and know how to use it. The biggest thing I see, especially manufacturing, right, John? We're running presses. We're running machinery. We're running porcelain tile. We can't stop what you need to give the employees time.

It's some way to carve out 30 minutes or 60 Minutes one time of year and explain to them what they are, how they work, and what's right for them. This is how I tell employers you're spending seven thousand dollars a year on average per employee on their benefits.

If they get paid...